The Company is operating under the provisions of the Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as the same may be in force from time to time and modified or amended from time to time (hereafter the “Markets in Financial Instruments Directive (2014/65/EU) or “MiFID II”), which was transported into Cypriot Law, the Investment Services and Activities and Regulated Markets Law of 2017 (Law 87(I)/2017).

This Risk Disclosure Statement (“the Statement”) provides you with information about the risks associated with contracts for difference (“CFDs”), which you (“the client”, “you”) may trade through services provided to you by the company.

In addition, you can refer to the Key Information Document (hereafter “KID”), which provides you with key information about the Company’s investment products. This information is required by law to help you understand the nature, costs, risks and rewards of this product and to help you compare it with other products.

3. Services offered by the Company:

Our services are provided on an execution only basis. We do not provide investment advice in relation to our CFDs or services. CAPITAL.COM acts as the principal in all dealings and is the sole execution venue for its clients’ orders.

4. Contracts for Differences (“CFDs”)

A CFD is a type of transaction the purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the value or price of a relevant underlying asset. CFDs are traded over-the-counter and no exchange or other external execution venue will be involved in the transaction. CFDs involve greater risk than investing in on-exchange products, as market liquidity cannot be guaranteed and it may be more difficult to liquidate an existing position. The prices and other conditions are set by us in accordance with our obligation to provide best execution as included in our Order Execution Policy and in accordance with our Order Execution Policy and in accordance with our Terms & Conditions.

The services of CAPITAL.COM are available for retail clients, professional clients and eligible counterparties. CFDs are high risk and complex financial products, generally used for speculative purposes, which are not suitable for many members of the public. CFDs are not suitable for “buy and hold” trading, therefore if the client does not have enough time to monitor such investment on a regular basis, he or she should not trade in CFDs.

5. Special Statement for Residents of Spain. CFD is, a product that is complex and difficult to understand. The National Securities Market Commission of Spain (Comisión Nacional del Mercado de Valores) has determined that, due to the complexity of the CFDs and the risks involved, the purchase of CFDs by retail investors is not appropriate/suitable. A CFD is also a leveraged product and the losses incurred may be greater than the amount initially invested.

6. Example of how a CFD works. You think a listed share (e.g. Category 1 share) is undervalued and that its price will rise. You decide to buy 4000 CFDs in that Category 1 share at the price of 10€ per CFD. Your position is therefore 40000€ (4000 x 10€). You do not actually pay 40000€: the amount you pay depends on the margin required. If the required margin is 5% that means your minimum initial payment is 2000€ (40000€ x 5%). The return you get on this initial payment depends on the price at which this Category 1 share is traded when you decide to close your position (that is, when you sell the CFD).

If the price of Category 1 decreases by 5% (from 10€ to 9.5€), and the leverage is 20, you lose the total amount (-100%) of your initial margin payment, i.e. you lose 2000€. If the price of Category 1 decreases by 10% (from 10€ to 9€), and the leverage is 20, you lose your initial payment of 2000€, and we will ask you for another 2000€ (margin call) if you want to keep your contract open. This means that your losses may be more than your initial margin payment.

In addition to any profits or losses, there are different types of costs linked to transactions in CFDs that will impact the effective return. Costs related to CFD trading include spreads (that may be marked-up) and overnight premiums. If, for example, a Category 1 Share is quoted at 141.50€/141.70€, then the spread equals to 20 € cents. If this spread remains at 20 € cents, when you close your trade you will effectively pay 20€ cents for every share traded as a spread. The overnight premium rates are derived based on monthly benchmark interbank rates. Overnight premium figures and cut-off times for charging them can be found in the relevant instruments’ details section at capital.com and on the Company’s app. You should be aware of the possibility that other taxes or costs may exist that are not paid through or imposed by the Company. It is your sole responsibility to bear these additional costs. Costs related to CFD trading can be complex to calculate and may outweigh the gross profits from a trade.

This Statement provides a general description of the risks associated with trading CFDs over-the-counter. This Statement does not explain all the risks involved in trading CFDs or how such risks relate to your personal circumstances.

CFD trading involves risk to your capital. You are highly recommended not to invest cash that you cannot afford to lose.

If you choose to enter a trading relationship with us, it is important that you remain aware of the risks involved, that you have adequate financial resources to bear such risks and that you monitor your positions carefully. If you are in any doubt about the risks involved, you should seek professional advice.

By entering a CFD transaction with CAPITAL.COM the client acknowledges, understands and agrees that:

Trading CFDs is highly speculative and risky.

Trading CFDs is highly speculative, involves a significant risk of loss and is not suitable for all investors. CFDs are among the riskiest types of investments and can result in large losses.

CFDs are only suitable for those clients who:

understand and are willing to assume the economic, legal and other risks involved;

are experienced and knowledgeable about trading in CFDs and in the underlying assets; and

are financially able to assume losses significantly in excess of the margin or the deposit.

CFDs may not be appropriate for you.

Before the Company opens an account for you, the Company is required to make an assessment of whether the products and/or services you have chosen are appropriate for you, and to warn you if, on the basis of the information you have provided, that any product or service is not appropriate.

We may ask you for information about your financial assets and earnings. We do not monitor on your behalf whether the amount of money that you have sent us or your profits and losses are consistent with that information. It is up to you to assess whether your financial resources are adequate and what level of risk you take.

If the client is warned that the given CFD is not appropriate for him/her and still decides to deal with the Company, the client is deemed to have confirmed that he/she understands the risks involved and accepts them.

The past performance of a CFD is not a useful indicator.

Past performance of a CFD is not a useful indicator of its future performance. The value of underlying asset can go down as well as up.

There are risks related to market liquidity.

Liquidity risks affect your ability to trade. It is the risk that your CFD or asset cannot be traded at the time you want to trade (to prevent a loss, or to make a profit). In setting our prices, spreads and the size limits in which we deal, we take into account the markets for the relevant underlying assets. Market conditions can change significantly in a very short period of time. Under certain trading conditions it may be difficult or impossible to liquidate a position.

Trading OTC entails risk.

When trading CFDs with us the orders will not be executed on a recognized or designated investment exchange and will be executed OTC. All positions entered into with us must be closed with us and cannot be closed with any other entity. OTC transactions may involve greater risk than investing in on-exchange transactions because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an OTC transaction or to assess the exposure to risk. There is no central clearing and no guarantee by any other party of our payment obligations to you, so you are exposed to credit risk with CAPITAL.COM. You must look only to CAPITAL.COM for performance of all transactions in your account and for return of any margin.

There are gapping related risks.

Financial markets may fluctuate rapidly and the prices of our products will reflect this. Gapping is a risk that arises as a result of market volatility. Gapping occurs when the prices of our CFDs suddenly shift from one level to another, without passing through the level in between. There may not always be an opportunity for you to place an order or for the platform to execute an order between the two price levels.

There are risks related to holding long CFD positions.

Being long in CFDs means you are buying the CFDs on the market by speculating that the market price of the underlying will rise between the time of the purchase and sale. As the owner of a long position, you will generally make a profit if the market price of the underlying asset rises whilst your long CFD long position is open.

You will generally suffer a loss, if the market price of the underlying asset falls whilst your long CFD long position is still open. Your loss will be the difference of the market price of the underlying asset at the time of purchase compared with the one at the time of the sale, multiplied by the amount of CFDs involved (plus the relevant costs of execution). Your potential loss may therefore be bigger than the initial margin deposited.

You might also suffer a loss due to the closure of your position by the Company in case you do not have enough cash for the margin on your account to maintain your position open.

There are risks related to holding short CFD positions.

Being short in CFDs means you are selling the CFDs on the market by speculating that the market price of the underlying asset will fall between the time of the purchase and sale. As the owner of a short position, you will generally make a profit if the market price of the underlying asset falls whilst your CFD short position is open.

You will generally suffer a loss, if the market price of the underlying asset rises whilst your CFD short position is still open. Your loss will be the difference of the market price of the underlying asset at the time of purchase compared with the one at the time of the sale, multiplied by the amount of CFDs (plus the relevant costs of execution). Your potential loss may therefore be bigger than the initial margin deposited.

You might also suffer a loss due to the closure of your position by the Company, in case you do not have enough cash for the margin on your account to maintain your position open.

High leverage and low margin can lead to quick losses for clients.

The high degree of “gearing” or “leverage” is a distinct feature of CFDs. The effect of leverage makes investing in CFDs riskier than investing directly in the underlying asset. This is a result of the margining system applicable to CFDs which generally involves a small deposit relative to the size of the transaction, so that a relatively small price movement in the underlying asset can have a disproportional impact on your trade.

A small price movement in your favor can provide a high return on the deposit, however, a small price movement against you may quickly result in significant losses.

If losses occur, you may be required to pay substantial additional funds on short notice to maintain your position open. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.

Please note that if a resident of Spain decides to trade with leverage greater than 1:10 a set of additional rules and procedures will become applicable. Such set of additional rules and procedures can be found in Section 12.1 of the Company’s Terms & Conditions.

StopLoss Orders cannot always protect you from losses.

CAPITAL.COM offers you the opportunity to choose Stop Loss Orders to limit the potential losses you can incur from an open position. This option automatically closes your position when it reaches a certain price limit. There are some circumstances in which a ‘stop loss’ limit is ineffective, e.g., where there are rapid price movements or market closure.

You have an obligation to maintain margin requirements.

The client must always maintain a minimum margin on his/her open positions. It is your responsibility to monitor your account balance. The client may receive a margin call to deposit additional cash if the margin in his/her account is too low. You may need to provide us with substantial additional funds to meet your margin requirement on short notice to maintain your positions open. Failure to do so, may result in your positions being closed at a loss for which you will be liable.

Only cash settlement is available.

The client understands that CFDs can only be settled in cash and the difference between the buying and selling price partly determines the result of the investment.

You may lose the full amount invested.

It is possible for adverse market movements to result in the loss of your account balance in full or even more. In case you loose more that your current account balance, we will bear the negative consequences of such adverse events and your losses will be limited to your then current account balance.

Failure to monitor positions entails risks.

It is important that you monitor all of your positions closely. It is your responsibility to monitor your positions and during the period that you have any open positions you should always have the ability to access your account.

Prices, margins and valuations set by CAPITAL.COM may differ from those provided elsewhere.

CAPITAL.COMwill provide the prices to be used in trading, the valuation of client positions and the determination of margin requirements. The performance of your given CFD will depend on the prices set by us and the market fluctuations in the underlying asset to which your CFD relates. Each underlying asset therefore carries specific risks that affect the result of the CFD concerned.

You have no rights to the underlying assets.

You have no rights or obligations in respect of the underlying instruments or assets relating to your CFD. The client should understand that CFDs can have different underlying assets, including, equity, indices and commodities. Specifically,, in case of an equity CFD you will not receive any voting rights.

CFDs are not suited for long term investors.

Holding a CFD open for a long period leads to an increase in the associated costs. It may be more beneficial for the client to buy the underlying asset instead.

Investing in CFDs may entail a currency risk.

Your account with CAPITAL.COM will be held in a currency which may be different from the currency you used to deposit, accordingly you should be aware of the relevant currency fluctuations.

There are risks related to the features of CAPITAL.COMs trading platform.

CAPITAL.COMs trading platform immediately executes the client’s order once he/she enters the notional amount and clicks “Buy/Sell”. There will be no opportunity to review the order after clicking “Buy/Sell” and the sent orders cannot be cancelled or modified. This feature may be different from other trading platforms you have used in the past. You should utilize the demo account to become familiar with CAPITAL.COMs trading platform before actually trading with the Company. By using CAPITAL.COMs trading platform, even through a demo account, you agree to the one-click system and accept the risks related to the immediate execution feature.

CAPITAL.COMis not your adviser or fiduciary.

Generic market information provided by CAPITAL.COM to its clients is not intended to be and is not investment advice or personal trading recommendations. Such information is not and should not be considered as an offer to buy or sell, or solicitation of an offer to buy or sell any CFD. Your decision to enter a CFD with the Company and your decision as to whether such transaction is appropriate and proper for you, is your independent decision.

The Company is not acting as an advisor or serving as a fiduciary to its clients. You are responsible for managing your tax and legal affairs including makingany regulatory filings and payments and complying with applicable laws and regulations. We do not provide any regulatory, tax or legal advice. If you are in any doubt as to the tax treatment or liabilities related to the CFDs offered, you may wish to seek independent advice.

21. Recommendations Are Not Guaranteed

The generic market recommendations provided by the Company (which do not constitute a personal recommendation or investment advice) are based solely on the judgment of the Company’s personnel and should be considered as such. Customer acknowledges that Customer enters into any Transactions relying on Customer’s own judgment. Any market recommendations provided are generic only and may or may not be consistent with the market positions or intentions of the Company and/or its affiliates. The generic market recommendations of the Company are based upon information believed to be reliable, but the Company cannot and does not guarantee the accuracy or completeness thereof or represent that following such generic recommendations will reduce or eliminate the risk inherent in trading CFDs.

22. Your trades may be taxable.

There is a risk that your trades may be or become subject to tax and/or any other duty, e.g., due to changes in the relevant laws and regulations or your personal circumstances. The Company does not offer tax advice. The client is responsible for any taxes and/or any other duty which may accrue in respect of his/her trades.

23. There is no guarantee of profit.

There are no guarantees of profit nor of avoiding losses when trading CFDs. Neither the Company nor its representatives intend to provide nor can they actually provide such guarantees. The Client has been alerted by means of this Statement that risks are inherent to trading CFDs and that he/she and must be financially able to bear such risks and withstand any losses incurred.

24. Customer May Not Be Able to Close Open Positions

Due to market conditions which may cause any unusual and rapid market price fluctuations, or other circumstances, the Company may be unable to close out Customer’s position at the price specified by Customer and the risk controls imposed by the Company might not work and Customer agrees that the Company will bear no liability for a failure to do so.

25. There are risks related to system failures.

The CFD trades are carried out exclusively on-line (via Internet). While trading on our platform, system errors might occur. You should be aware of the risks that may result from any failure, malfunction or disruption of any transmission, communication system, computer facility or trading software, whether belonging to the Company or to any other external party, which could mean that your order may be delayed or fail.

26. Quoting errors entail risk.

Should a price quoting error occur (including responses to relevant client requests), CAPITAL.COM is not liable for any resulting errors in account balances and reserves the right to make necessary corrections or adjustments to the relevant account. Any dispute arising from such price quoting errors will be resolved on the basis of the fair market value, as determined by CAPITAL.COM in its sole discretion and acting in good faith, of the relevant market at the time such an error occurred. In cases where the prevailing market represents prices different from the prices we have posted on our platform, CAPITAL.COM will attempt, on a best efforts basis, to execute orders on or close to the prevailing market prices. This may or may not adversely affect the client’s realized and unrealized gains and losses.

27. There are legal & regulatory risks involved.

A change in laws or regulations made by the government or a regulatory body may increase the costs of operating a business, reduce the attractiveness of an investment and/or change the competitive landscape and by such materially alter the overall profit potential of your investment. This risk is unpredictable and may vary depending on the market for the underlying asset of a given CFD.

28. The protections we receive from third parties may not be extended to you.

Any guarantees or legal protections that CAPITAL.COM is entitled to by means of a contract with any of our consultants, business process outsourcers, vendors or any other third party or intermediary, or that are available to us as a matter of law, may not cover or protect you in case you suffer a loss or damage as a result of such third party’s failure to fulfill the obligations owed to us.

29. Client Money.

All funds and currencies belonging to you (“client money") shall be held by us in a designated client money bank account; and are subject to a right of off-set for all liabilities that you owe to us. The designated client money is segregated from the assets of the Company and is deemed client money for the purposes of the CySEC rules. We may place your funds in our designated client money account in a different currency to your base currency. Such client money will be at least equal in value to your base currency and will be in compliance with Cyprus regulatory requirements. No interest is due or will be paid in respect of client money.

30. You are not automatically entitled to compensation under the Cyprus investor compensation scheme and the compensation is not unlimited.

CAPITAL.COM participates in the Investor Compensation Fund for clients of Investment Firms regulated in the Republic of Cyprus. Certain clients will be entitled to compensation under the Investor Compensation Fund where the Company is unable to meet its obligations towards its clients due to its financial circumstances and when there is no realistic prospect of improvement in the above circumstances in the near future. To receive compensation you will have to file a compensation claim to the Fund in a timely manner and get it approved by the Fund’s Administrative Committee. In any case, the compensation shall not exceed twenty thousand Euro (EUR 20.000) per each entitled client. For more details please refer to our Investor Compensation Fund Policy.

Currently, any claims related to trading CFDs on virtual currencies are not subject to the compensation scheme offered by the Fund.

31. Risks related to trading CFDs on virtual currencies.

there is no specific EU regulatory framework governing trading in CFDs on virtual currencies;

trading in such products falls outside the scope of our MiFID regulated activities;

CFDs on virtual currencies are complex and high risk and as such come with a high risk of losing all the invested capital;

virtual currencies are underlying assets that can widely fluctuate (high volatility) and may result in significant loss over a short period of time;

CFDs on virtual currencies are not appropriate for all investors and therefore, you should not trade in such products if you donot have the necessary knowledge and expertise in this specific product;

you should always be fully aware and understand the specific characteristics and risks related to the CFDs on virtual currencies you are planning to trade;

trading in CFDs on virtual currencies does not entitle you to any protection under the Investors Compensation Fund scheme;

you will not be entitled to refer to the Cyprus Financial Ombudsman in case of a dispute related to trading CFDs on virtual currencies.

32. TARGET MARKET ASSESSMENT

As required by the Markets in Financial Instruments Directive of 15 May 2014 (MiFID II) and in accordance with the Investment Services and Activities and Regulated Markets Law of 2017 (Law 87/(I)/2017), the Company is required to identify its target market. The Company shall provide its services to Clients which fall within its target market assessment.

33. Updates

The Company has the right to amend the current Policy as per its discretion and at any time it considers is suitable and appropriate. In such an event the Company will notify the client accordingly. The Company shall review and amend the current policy at least on an annual basis. The Policy is available for review by clients upon request and it is uploaded to the Company’s website.

By entering the Terms & Conditions with CAPITAL. COM you declare that you understand the risks related to trading CFDs (including those outlined above), that you are willing and able, financially and otherwise, to assume these risks and that the loss of your entire account balance will not be detrimental to your lifestyle.